- One-stop digital platform planned
- Airline must modernise, says CEO
- Lack of direct flights ‘unacceptable’
Saudi Arabia’s new airline, Riyadh Air, is to compete with global travel companies such as Booking.com and Expedia by developing a one-stop digital platform for customers to plan and manage entire trips.
The website will cover flights, accommodation, car rentals, AI-generated itineraries and tickets to attractions and concerts.
It will also include shared shopping cart features that support group reservations with split payments, and status perks such as priority boarding and fast-track options.
Tony Douglas, CEO of Riyadh Air, said that major travel platforms like US-listed Booking.com, which has a market capitalisation of $150 billion, dominate the travel industry, while even the world’s largest airlines hold significantly lower double-digit valuations.
Delta Air Lines, the most valuable airline in the world in 2023, held a market cap of $34 billion, according to figures from Statista. Ryanair Holdings ranked second, valued at $23 billion.
“We do all the hard work, we’ve got the balance sheet with aircraft on, which depreciate quickly … [but] he or she who controls digital, controls where the value is at,” he told the Future Investment Initiative (FII) in Riyadh on Tuesday.
Riyadh Air, owned by the Saudi Public Investment Fund, aims to set itself apart as a “digitally-led business that enables travel, not to be confused with a regular or conventional airline”, he said.
“We don’t have a legacy. We don’t have to use systems that have been around our industry for many decades. Our board [had a strategic choice]: do we want to be the last big startup that does it the conventional way or the first big startup that becomes a true digital native?”.
Saudi Crown Prince Mohammed bin Salman views aviation as a central element of his Vision 2030 reform agenda, with a goal to more than triple annual passenger traffic to 330 million by the end of the decade.
Riyadh Air aims to capitalise on the kingdom’s highly connected population, where 52.3 percent of people spend over seven hours a day online and 99 percent primarily use mobile devices.
The Gulf carrier wants to engage travellers much like tech giants Amazon and Uber, Douglas said, describing it as “the way we do it in our normal walk of life but until this point wasn’t normal in commercial aviation”.
“Why is it that every other industry seems to have modernised, from banking to healthcare, but we still book and manage our flights the same way we did the last decade?” he said.
With Saudi travellers expected to average 3.2 trips per year, well above the rates in Western Europe and North America, Riyadh Air is banking on its digital platform to capture a significant share of the market.
- Saudi Arabia pins branding hopes on Riyadh Air launch
- Riyadh Air signs stadium naming deal with Atlético Madrid
- Riyadh Air awards $400m ground handling contract
The airline, which announced orders for 60 narrow-body aircraft from Airbus this week, wants to reach 100 international cities by 2030 and set itself apart with a broader frequent flyer programme than its rivals.
Last year, it agreed to purchase 39 Boeing Dreamliners with options for an additional 33 jets.
Douglas said at present the level of global connectivity from Saudi Arabia was “simply not good enough”.
“We don’t fly directly to Tokyo, Shanghai, Seoul or Sydney. It’s simply unacceptable,” he said.
Saudi Arabia is losing business opportunities to its Gulf neighbours, Douglas said, adding that the highest volume of First and Business class travellers on Qatar Airways are Saudi nationals.
“It’s just wrong,” the former Etihad CEO said.